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Regulating The Future Carrot or Stick ?
1. Practice
14 • Environmental Health News • September 2017
David Edwards is
a member of the
government’s better
regulation panel
E
arlier this year, I drew
attention in EHN to several
issues with two elements of
the Food Standards Agency
(FSA)’s ‘regulating our
future’ progamme – permit
to trade (PTT) and the
introduction of the certified
regulatory auditor (CRA).
I argued that the PTT proposal had the
potential to be inherently unfair since it would
force start-ups into a regulatory straightjacket
before they can even trade, potentially
starving them of cash flow at a time in the
business lifecycle when SMEs in particular
are vulnerable. At the same time, existing
businesses and potential competitors would
be allowed to trade well below those same
standards. This can be evidenced from the
FSA’s own data and its flagship food hygiene
rating scheme (FHRS).
A recent Freedom of Information Act request
confirmed that in March, as many as 1,610
foodservice businesses were operating without
apparent fear of closure or enforcement, at a
level considered unsatisfactory by the FHRS
rating system, being rated two or less. In all
cases, they have traded for more than two
years without rerating — quite how consumers
can have confidence in ratings that old is
another matter and is something the FSA will
need to address.
What any start-up needs is clear,
unambiguous, low-cost advice and support;
probably more importantly, though, they need
good signposting to that information. There
is a wealth of good material out there at low
or no cost from both the public and private
sector. The FSA’s ‘safer food, better business’
project has been a great success and is a
shining example of what can be done, but there
are also many commercial online tools and
telephone advice services, often developed by
entrepreneurial EHOs, that are good value and
well produced. The commercial sector is also
bringing forward exciting training innovations
such as the just-released EyeSucceed initiative,
developed with Google, which combines
augmented reality with wearable technology
and, in the near future, artificial intelligence.
The more business-friendly local authorities
have also been providing innovative help for
several years. Cornwall Council is probably the
leading light in this respect, having successfully
switched to a service based on charging for
assured advice (EHN, August 2016, page 18).
Instead of wielding the heavy hand of yet
more regulation and centralised control, the
government and the FSA should be working
more closely with those local authorities,
commercial companies and — in particular
— trade bodies to enhance and signpost the
help available to food operators. For those
authorities that have yet to develop a Cornwall-
type offer, I would suggest many could
David Edwards calls
for the FSA to revisit the
concept of the certified
regulatory auditor in
Regulating our Future
There really does need to be some
better understanding of commercial
realities if it is to succeed
usefully partner up with commercial
service providers and trade bodies to
everyone’s benefit. It really is time to
break down the regulatory divide and
work more collaboratively.
It is pleasing to see that the FSA has
now acknowledged that PTT is unlikely
to receive legislative support without
significant evidence of need and has
settled on ‘enhanced registration’ as
a better way forward. Quite what
form that will take remains unclear
but hopefully it will be framed in a
way that enables rather than hinders
entrepreneurs and new businesses.
There really needs to be some serious
research here or at the very least a
review of the literature to establish
what help is most effective for SMEs
and how best to deliver it.
For more forward-thinking local
authorities and particularly CIEH, there
could be an important role to play.
Practice
David Edwards is
a member of the
government’s better
regulation panel
David Edwards callsDavid Edwards callsDavid Edwards
for the FSA to revisit the
concept of the certified
regulatory auditor in
Regulating our Future
There really does need to be some
better understanding of commercial
realities if it is to succeed
usefully partner up with commercial
service providers and trade bodies to
everyone’s benefit. It really is time to
break down the regulatory divide and
work more collaboratively.
It is pleasing to see that the FSA has
now acknowledged that PTT is unlikely
to receive legislative support without
significant evidence of need and has
settled on ‘enhanced registration’ as
a better way forward. Quite what
form that will take remains unclear
but hopefully it will be framed in a
way that enables rather than hinders
entrepreneurs and new businesses.
There really needs to be some serious
research here or at the very least a
review of the literature to establish
what help is most effective for SMEs
and how best to deliver it.
For more forward-thinking local
authorities and particularly CIEH, there
could be an important role to play.
Carrots
14-15_EHN_September_Carrots.indd 14 30/08/2017 10:55
2. Environmental Health News • September 2017 • 15
proposed approved auditors will be expected
to report failings directly to local authorities.
After all, how can a government-approved
auditor not report serious failings?
But let’s get real. Why would a small business
pay for that? Only perhaps if they are desperate
for a new FHRS rerating, which implies they
had a bad one to start with and are now very
confident.
As for recognising existing private
inspections, whilst there is scope for this to
add to the FSA or local authority targeting
intelligence, it is very clear from a recent
seminar organised by CIEH that private
companies are worried about the effects on
customer relations if they are seen simply as a
paid-for arm of the regulator.
So what’s to be done? In my view, the FSA
needs to back off from the concepts of PTT and
the CRA, and recognise that their primary role
here is not to introduce more controls, more
regulation and more oversight but to help with
what already exists. I believe that it should step
away from the current emphasis on its role, and
focus more on enhancing the role of EHPs in
local government and encouraging recognition
of what is already taking place in the private
sector.
Private inspection companies would,
I am sure, be more than happy to develop
schemes run by reputable trade bodies, such
as the British Hospitality Association, which
are perfectly capable of setting appropriate
standards for members and are best left to
themselves to decide who undertakes audits
and what their qualifications should be. Several
have been doing so for many years and to a
very high standard generally.
The FSA, with help from colleagues in the
regulatory delivery sector, could encourage
trade bodies and private sector inspection
companies to create bespoke relevant schemes
with the right skills and then approve these,
rather than working down to the level of the
individual auditor.
There is no doubt an ambitious project such
as ‘regulating our future’ is complex, but in
my opinion, there really does need to be some
better understanding of commercial realities if
it is to succeed.
For a future EHN, I would like to take a look
at the issue of sharing data and information
technology. Surely, for a forward-looking
programme, this should be the starting point of
any new thinking. E
DavidEdwardsMCIEHwasco-founder
offoodsafetyconsultancyCMIplcand
isamemberofthegovernment’sbetter
regulationpanel.Lastyear,hewasawarded
aCIEHlifetimeachievementaward
CIEH on ROF
TonyLewis,CIEH
directorofpolicy
‘Regulating our future’
(ROF) is indeed, a complex
and ambitious programme,
as David states, and there
is much to be admired, in both David’s
analysis and the RoF itself.
Over the past 12 months, CIEH has
been working closely with all sides to
ensure that ROF will deliver the best
possible protection for the consumer.
This has resulted in our holding
numerous conversations with the FSA,
other trade associations and commercial
consultancies that already offer
assurance services to industry. We have
had representatives at virtually all the
FSA’s recent ‘round-robin’ consultation
meetings with local authority colleagues
and on the expert advisory panels.
CIEH has listened to all the disparate
voices and we fully support the work
to provide enhanced registration and a
revised risk/segmentation system. We
acknowledge the challenges ahead in
gathering, handling and securing data,
and we have also listened to the concerns,
emerging from sources regarding the risks
associated with third-party assurance.
However, we also recognise the
added value that a carefully developed
assurance programme could potentially
bring, with the FSA’s position as the
central competent authority maintained
and the role of local authorities as the
competent authority in delivering local
official controls upheld and supported
by properly assured private sector
organisations where appropriate.
sticks
not
But let’s get real. Why would a small business pay for that?
Only perhaps if they are desperate for a new FHRS rerating
on approved commercial inspection bodies to
report on their standards, with retailers given
access in full to those reports.
In truth, there was nothing voluntary about
the schemes. If you didn’t comply, it was made
very clear the business would go elsewhere.
If a similar scheme is introduced in the high
street and catering sector that uses private-
sector certified regulatory auditors, where
will that pressure to sign up come from? Why
would a business purchase a commercial
FHRS inspection? The FSA has made it clear
in written answers to questions that their
Who better to come to for help than the
professional body for EHPs?
The second FSA proposal that I suspect
may go the same way as PTT is that of the
certified regulatory auditor (CRA). In my view,
this concept is a non-starter and I am surprised
its inherent complications were not recognised
earlier. It seems to me that officials developing
a future agenda have possibly failed to
understand the market dynamics that drive the
private inspection market and which therefore
underpin the whole concept of regulated
assurance and regulated autonomy.
T
he model being explored
to date is essentially
based on schemes such
as Red Tractor and
supermarket-driven
farm and manufacturer
assurance schemes. These
are generally presented
as ‘voluntary’ schemes that are industry- and
sector-leading, but for anyone who was in
at the start (as I was), they were far from
voluntary. Retailers used their significant
commercial power to insist the supply chain
complied and own-label manufacturers took
sticks
not
Who better to come to for help than the
professional body for EHPs?
The second FSA proposal that I suspect
may go the same way as PTT is that of the
certified regulatory auditor (CRA). In my view,
this concept is a non-starter and I am surprised
its inherent complications were not recognised
earlier. It seems to me that officials developing
a future agenda have possibly failed to
understand the market dynamics that drive the
private inspection market and which therefore
underpin the whole concept of regulated
assurance and regulated autonomy.
T
he model being explored
to date is essentially
based on schemes such
as Red Tractor and
supermarket-driven
farm and manufacturer
assurance schemes. These
are generally presented
as ‘voluntary’ schemes that are industry- and
sector-leading, but for anyone who was in
at the start (as I was), they were far from
voluntary. Retailers used their significant
commercial power to insist the supply chain
complied and own-label manufacturers took
14-15_EHN_September_Carrots.indd 15 30/08/2017 10:56